Executive Summary Every business organization reaches to the customers through their goods or services. To sell the products to the customers a number of activities are being performed. This is called marketing and it is an important function. Marketing is the performance of business activities that directs the flow of goods and services from producer to the customer. It is the activity that directs to satisfy the human needs through exchange process. Marketing starts with the identification of a specific need of customers and ends with satisfaction of that need. The customer is found in the beginning and end of marketing process. In marketing a large number of activities are performed. For easy understanding these activities are divided in 4 groups for products and 7 groups for services. These elements are product, price promotion, placement for products and three additional elements for services are process, people and physical evidence. These are called elements of marketing mix. Promotion is one of the elements of marketing mix. Promotion decisions are taken simultaneously with other decisions like finding target group, determining objectives, budgeting for promotion, launching of new products, distribution etc. Promotion is one of the variables through which information regarding products or services is being communicated to customers to change their attitude and behaviour. Marketers are concerned with effective utilization of promotion-mix to increase sales and market share. Methods of promotion include advertising personal selling, publicity, sales promotion and packaging. Sales Promotion is the activity that aims directly to influence buyers to buy products and increase sales. In sales promotion mainly three parties are involved i.e. consumers, traders and sales force. Sales promotion refers to many kinds of incentives and techniques that are directed towards consumers, traders and sales force with the intention to increase sales in short term. Sales promotions include incentive offering and interest creating activities which are generally short term marketing events other than advertising, personal selling, publicity and direct marketing. The purpose of sales promotion is to stimulate, motivate and influence the purchase and other desired behavioural responses of the firm s customers. Kazmi and Batra xiii
The main objective of sales promotion is to increase the sales of products in short term by influencing the behaviour of buyers. Sales promotion methods are many and these are selected as per the target groups. For this purpose, a sales promotion strategy is to be prepared to achieve the objectives effectively. Sales promotion strategy directs the manager in selection of parties, methods of sales promotion, implementation of methods and measuring effectiveness of whole efforts regarding sales promotion. With sales promotion strategy sales can be increased in short term. Strategy is the game plan to achieve the targets as per planning. It explains what, when, where, who and how to do so that objectives of the planning are achieved. Without the strategy the task may not be completed effectively. Sales promotion strategy would help to neutralize the effective of competition and defend the company in the market in performing the sales related tasks. The importance of sales promotion strategy is increasing day by day and in future higher level of competition it would increase further. Indian industry is a fast developing industry. Fast Moving Consumer Goods (FMCG) are more in demand and frequently purchased by customers. These goods include all consumable goods (other than pulses and grains) and consumers buy at regular intervals in small quantities. Main items in this category are detergents, soaps, shaving products, shampoos, toothpastes and brushes, packed food stuffs, household accessories, creams, oils, tea, coffee etc. Contribution of FMCG sector in every economy is significant. Now, due to globalization, every economy is facing tough competition. Entries of MNCs and cheaper import have made the situation more difficult. To carry out the business in this sector, it has become very difficult. Most of the companies have applied various elements of promotion mix. Promotion mix elements include advertising, publicity, sales promotion, personal selling and packaging. Sales promotion is one of them and it is our concerned topic. In present competitive situation most of MNCs had developed sales promotion strategy in selection of parties, techniques and managing sales promotion techniques effectively and efficiently. This strategy provides competitive advantage to the companies in the market to grow, stabilize and excel in business performance. Therefore, sales promotion strategy is very significant for companies to earn bread and butter. This attracted me to select and study this topic. xiv
In present situation not only in one industry but also all sectors are facing tough competition. It has become very difficult to grow, stabilize and excel in business performance. It is required to influence the attitude and behaviour of buyers. A lot of promotional activities are needed. The leading companies are using difference techniques for promotion. These are advertising, publicity, sales promotion, personal selling and packaging. These are serving the difference objectives. Sales promotion is one of them and gives a great impact on customer buying behaviour to increase sales in short term. It contributes to neutralize the competition effect. To achieve the objective a strategy is needed for effective application of sales promotion. The contribution of sales promotion strategy is significant in present time to stay in business in competitive market. The importance of it attracted my attention to select this topic for research study. The study of this topic has been undertaken with a number of objectives. Following are the objectives of this study: (a) To understand the concept of promotion, methods of promotion in markets, sales promotion, need, objectives, importance in competitive situation, and relation with various promotional methods, (b) To study the tools or techniques of sales promotion, impact on sales, parties involved in sales promotion, management of sales promotion measures, need for sales promotion strategy and its importance, and role of sales promotion strategy in progress of number of customers, sales volume, profits and progress of the business as a whole. (c) To understand Indian FMCG sector and find out the practices adopted by the leading companies regarding sales promotion strategy, their effects and difficulties faced in it by the selected companies. (d) On the basis of study, to summarize the findings and give suggestions for further improvement in sales promotion strategy practices and its contribution in achieving objectives of sales promotion. xv
(e) To meet the requirement of Ph.D research study. This study is relating to promotion-mix elements out of total marketing efforts. It will cover mainly sales promotion, methods for sales promotion, parties involved for sales promotion, combination of promotion methods with sales promotion, sales promotion strategy and its related concepts. This topic has studied in FMCG sector in world and Indian industry. Leading companies have been selected on the basis of their market share for the research study and their comparative study has been carried out. It is expected the study of this topic would contribute in clarifying the all concepts relating to marketing communication, promotion mix, sales promotion, strategy relating to sales promotion, impact of sales promotion strategy on sales, profit and profitability of companies, market share and goodwill of the companies. The beneficiary from the study of this topic would be first of all self-researcher, academicians, practicing managers, prospects researchers and the banks. If these parties refer this research study in future may take advantage of the finding and suggestions. Academician, practicing managers and research students may take benefits for academic purpose and on the jobs. The FMCG companies may implement the suggestions for improvement of sales for achieving sales targets. It can be said the benefits would be multidimensional for above mentioned parties. Research methodology process includes a number of activities to be performed. These are arranged in proper sequence of timing for conducting research. One activity after another is performed to complete the research work. Research methodology includes the following: types of Research, sources of data, instruments for data collection, methods for data collection, time duration, statistical tools. Sampling and limitations of research work. The topic for the research study is sales promotion strategy and the nature of the topic is theoretical and descriptive. So the conduct the research study the type of research suitable is descriptive research only. The data are collected from sales records, dealers, customers and salesmen of the companies performing in FMCG sector. The descriptive research has met the requirement of research study. xvi
For the study purpose both primary and secondary data are used. The primary data collected from sales men of the companies, customers and dealers dealing in the products of the company. The secondary data collected from records of the company, retailers and dealers. The data of past sales also have been collected. The primary and secondary data have been collected to cover every aspect of the study. The primary data are related to behaviour and response of employees, dealers and customers. The secondary data shows the sales of the company product wise. Considering merits and demerits of both sources of date, these have been used in combination to meet the requirements of the research work. For collection of data the instruments have been used are; questionnaire, telephone, mobile phone and facsimile, mail, interview etc. These have been used for collection of data from respondents. The data have been collected from respondents from different places. So according to suitability of instruments for data collection, these data have been used. For collection of primary data for this research work survey and observation methods have been used. Experimental method is not found suitable for this study because the topic is a theoretical topic and there is no need to have experiments. Sampling is the process in which a representative part of a population for the purpose of determining parameters or characteristics of the whole population is selected. This is called a sample. It is easier to contact a smaller part of the population for data collection. It can be done within a limited time, efforts and with minimum cost. For selection of a sample special care should be taken that the sample is proper representative of the whole population. Every segment of the population should be included but the number should not be very large which may become difficult to manage within time and cost limits. For this research study purpose out of different sampling methods the stratified random sampling has been selected. The universe includes salesmen, wholesalers, retailers and customers of selected companies located in different parts of Gujarat region. Out of Gujarat region main cities like Ahmedabad, Vadodara, Surat, Rajkot and Bhavnagar have been selected. The salesmen are selected from branches of companies and further on the basis of availability during visits. Cities are divided into areas and from each area the dealers, retailers and customers have been selected from urban and rural areas of these cities. They have been xvii
selected randomly. So stratified random sampling has been used for the study. Keeping in view the proper representation of every segment of population and manageable size of the sample, the sample size selected is 400. The permitted time by the university for completion of research study for Ph.D degree is two years. Continuous efforts have been put to work on this research. It has been completed and submitted within the permitted time period. For data analysis measures of central tendency, standard deviation, variance will be used. For testing of hypothesis F Test and T test will be used. To carry out the research study the following limitations were expected and faced during the research study: (a) Availability of secondary data from sales records of the companies were difficult. (b) Salesmen, customers, dealers and retailers were reluctant or hesitant to share data. (c) Management may not like to share their views on the topic. (d) Time, cost and location factors become major difficulties in completion of research. (e) Sample size may not be exact representative of the universe. There is possibility of some error to a limited extent. However, to overcome the limitations and maintain the effectiveness of research work sincere efforts were put. xviii